Australian pay-television broadcaster Fox Sports will “definitely have to keep” its broadcast rights to the AFL, the top division of Aussie rules in the country, when its next tender process begins, according to Bedi Singh, chief financial officer of News Corporation.
The AFL’s current deal with commercial broadcaster Seven, Fox Sports, pay-television operator Foxtel and telecommunications company Telstra is worth A$1.26bn (€860.8m/$978.8m) over five years, from 2012 to 2016.
News Corp’s Australian division owns Fox Sports and Singh said the media conglomerate expects talks over a new AFL rights contract to “begin shortly.” The Fairfax Media news agency said the league has told the market it values its next broadcast rights deal at A$1.75bn over five years, and is understood to have had informal talks with broadcasters late last year.
Singh, speaking at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, said the AFL “was the big one” in terms of securing broadcast rights. “It's all about we have to drive the bottom line at Fox Sports, so we will definitely have to keep these rights but I think we have to look at other levels in terms of cost efficiencies and other things where we try to maintain the profitability,” he added.
“The key is we want to do things that are economically sensible. I don't think we are looking at getting into negotiations where you see the kind of stuff that's happening in the UK, hopefully.”
Singh was referring to last month’s UK rights deal for English Premier League football. UK pay-television broadcaster Sky will pay an increase of more than 80 per cent in its rights fee over the next three-year cycle, from 2016-17 to 2018-19, committing a total of £4.176bn (€5.5bn/$6.3bn) over the cycle for 126 matches per year through five packages. Pay-television broadcaster BT Sport will pay an average of £320m per year for 42 games in the other two packages.
Singh said News Corp Australia is unlikely to face the same kind of price inflation because Fox Sports bids with Foxtel, which is owned by News and Telstra.
He added: “The situation isn't as bad as the markets in Britain and the US because the good news is in Australia is that Telstra, the big telecom company, is our partner in Foxtel, and Foxtel is a partner with Fox Sports in going after sports rights. That tends to mitigate the inflation factor. But clearly I think there will be some.”